BMI, the research arm of Fitch Solutions Company, has retained its projection that the Philippine economy will expand by 5.4 percent in 2025, even as the country faces the impact of higher US tariffs on exports.

In its 25 August report, the firm pointed out that “monthly data show that external sector has remained resilient amid global trade uncertainty.” Philippine exports grew by 15.1 percent year-on-year in May, marking the fastest pace so far this year, ahead of the scheduled tariff hike on shipments to the US.

Originally set at 20 percent, the tariff was trimmed to 19 percent after President Ferdinand Marcos Jr. traveled to Washington in July to press for adjustments and to strengthen bilateral relations. The lower rate is expected to shave just 0.4 percentage point off economic output over the medium term — less severe than the 1.4 percentage point decline BMI earlier estimated in April.

The report noted that the one-week delay in tariff implementation, from 1 August to 7 August, “allowed businesses to front-load shipments,” but warned that “unless another delay is announced, we expect a sharp slowdown in the coming months.”

Economic managers last June downgraded the official 2025 growth target to 5.5 to 6.5 percent, from the original 6 to 8 percent range, citing global headwinds. The economy expanded by 5.4 percent in the first half of the year, with second-quarter growth inching up to 5.5 percent.

BMI said it is maintaining its projection as the Philippines remains a “largely domestically driven economy” even if global conditions worsen.

“While interest rates have eased considerably from their peak, erratic US trade policies will weigh on global investor sentiment and limit foreign direct investment inflows. As such, we see little prospect for a meaningful investment recovery in the near term,” the commentary said.